April 02, 2013

Painless ways to wield the budget axe

Spending money is fun and saving bucks is O.K., but scrimping is a downer for most of us, unless you have an Ebenezer Scrooge in your family tree.

If you’re dreaming of a plumper savings account, but you haven’t had much success in squirreling cash away, consider these four painless ways to rein in out-of-control spending.

  1. Make friends with your pocket calculator. It’s truly amazing how quickly those justifications arise when your desires for trinkets, trucks or fabulous fashions overwhelm logic and reason. It’s doubly so when a salesman expertly delivers a well constructed sales pitch that can pitch you right off your own personal fiscal cliff. Beware that “caring” salesman, who will happily feign friendship to close the deal. Whip out a calculator and run the numbers.
  2. Use reason and avoid rationale. Salesmen love emotional buyers. Don’t be one. Bring a note pad and paper when making a major purchase and take copious notes. This also sends a strong signal to the sales person that you won’t be swayed by emotional arguments.
  3. Don’t nod your head in agreement. When a salesman is smiling and nodding his head, you’ll find yourself reflecting that motion without even thinking about what you’re doing. A study published in the Journal of Personality and Social Psychology revealed the persuasive power that comes with imitating the up-and-down head nodding of a salesman. Shaking your head defeats your pledge to keep a steady head.
  4. Hold yourself to a 10-day cooling-off period. This is a particularly strategic move, when considering a major purchase. If that dream car or dream home still seems like a wise move and you’ve done the math, checked your emotions and are sure it’s the right choice for you, then buy it. The salesmen won’t be happy at your self-enforced cooling-off period, but you may avoid a financial pitfall. When in doubt, waiting is often a wise strategy.

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